Mexico has abruptly cancelled a contract worth $3.75 billion (58.9 billion pesos) with a Chinese-led rail consortium, just two days after it was awarded. The project to construct the country’s first bullet train faced opposition from local lawmakers.

The
China Railway Construction Corp. and CSR Corp. won the contract
Monday, which set off steam amongst opposition politicians, who
claimed the tender by the Chinese company, the sole bidder,
lacked transparency and legitimacy. A new auction will be held
and will include more bidders.

The Chinese-led group
included Mexican firms that are linked to the brother of former
President Carlos Salinas de Gortari.

The proposed 210-kilometer (130-mile) railway would link Mexico
City with the central manufacturing hub of Queretaro.

Esparza told the Televisa network the country’s President,
Enrique Pena Nieto made a last minute decision to back out of the
deal signed on November 3 and start the bidding process over. The
Chinese consortium was the only one to put forward a proposal by
the October 15 deadline, after Mitsubishi of Japan, Alstom of
France, Bombardier of Canada and Siemens of Germany all refrained
from bidding.

China also offered to finance 85 percent of the project from
loans from the Export-Import Bank of China.

Nieto is due to visit China from next week to participate in the
Asia-Pacific Economic Cooperation (APEC) summit, as well as a
two-day official state visit to develop ties between Latin
America’s second biggest economy and the world’s second largest
economy.